Chairman Eddie Goldsmith said that the Association members – conveyancers and solicitors responsible for 20% of all the residential property transactions in England and Wales – overwhelmingly supported remaining in the EU. Borrowers who were looking to make the biggest financial decisions of their lives wanted to see and feel that nothing is likely to risk their jobs or increase their mortgage payments.
“There is likely to be a period of nervousness in the housing/mortgage markets which could last for a couple of months,” he said. “We could see a reduction in housing transaction numbers until consumers and borrowers are more certain of what the position is.”
Solicitor Liz Seal, a partner heading up the residential conveyancing team at Plymouth-based law firm Curtis Whiteford Crocker, has already noticed that it is quieter in the property world under the shadow of Brexit.
“There is normally a lull in summer, but things tend to pick up a bit in September,” she says. “It was quite busy earlier in the year with people bringing forward their property purchases because of the higher rate of stamp duty which came into force on April 1. Current commentary in the sector inclines towards the suggestion that the market is stabilising after the first two quarters of this year being extremely busy and that this would have happened with or without Brexit. The latest data suggests more properties coming to market but a small decline from the same period last year in sales agreed and a small reduction in prices achieved.”
“Generally speaking, it has been quite steady for the last few years although our conveyancing work does tend to go in cycles. Fridays and the last day of the month are always busy for completions, or if there’s a bank holiday. And people always want to get in by Christmas every year. Spring is also traditionally a busy time for us.”
Eddie Goldsmith of the Conveyancing Association warned that, with the ball being in the buyer’s court, some hard negotiation on prices could result in a short-term fall. Liz Seal feels we should remain positive about the health of the housing market in the UK. “As a nation we aspire to home ownership rather than renting and with interest rates so low I am hopeful the market will remain steady despite the Brexit fears. One thing is certain now the decision has been made endless debate seems fruitless; the politicians just need to get on and negotiate the best trade deals they can with Europe and globally. At a domestic level, uncertainty is the problem. The housing market is affected by any changes in the economic climate and confidence is the best thing for our country nationally and locally.”
The property market is also likely to be affected by changes to the treatment of loan interest for tax purposes on rental income, due to come into effect in April 2017.
“The changes will be phased in over a number of years,” says Liz. “But commentary I have read suggests that private landlords will look at putting up rents to maintain their rental income because they will be paying more tax.
“The government seems to have a plan to penalise private landlords while not investing heavily in the social housing sector where demand is always greater than supply.
In this area, a lot of people are quite small investors, investing in property rather than putting their money into a pension fund. It seems that the additional property tax is specifically to discourage landlords from buying second properties.”
Brexit, new legislation and the prospect of parliamentary elections in the future all have an impact on the property market.
Liz Seal is a solicitor and partner at Curtis Whiteford Crocker which has offices in Plymouth, Tavistock and Torpoint.